“Georgia hog producers had a roller-coaster ride in 1995,” said
John McKissick, a livestock
economist with the University of Georgia Extension Service.

Pork prices and costs fluctuated enough during the year to make
heads spin and leave farmers
reeling.

The year’s highlight was that for the first time in history, the
nation became a net exporter of
pork. Largely because of demand from the Orient, the United
States exported more pork than we
needed for domestic consumption.

With increasing worldwide demand, prices increased slightly more
than many economists
expected to a high of about $50 per hundred pounds.

As the year comes to an end, though, prices have dropped back to
about $40 per hundredweight
— fairly low — and grain prices soared.

“That walked away with any profits hog producers were able to
accumulate during the middle
part of the year,” McKissick said.

McKissick expects pork production to be down 1 percent to 2
percent in 1996, compared to
1995. That decrease could drive prices slightly higher —
possibly $1 to $3 per hundredweight
higher than 1995 average prices.

However, with the higher grain prices increasing their costs,
that extra money will go toward
meeting feed costs rather than profits for hog farmers.

This market forces farmers to control costs even more carefully
than ever. Shrinking profits
remain in jeopardy as producers struggle to meet retail demand
with ever-increasing costs.

“Consumers will see a slight increase in pork prices at the
grocery store because of diminishing
pork production,” McKissick said. “Retail prices would be
something in the neighborhood of 2
percent to 3 percent higher in 1996.”

He adds, though, that when those prices are adjusted for
inflation, prices will remain fairly stable.
The higher-quality pork cuts, such as roasts, hams and loins,
may increase in price more quickly
than bacon or ribs.

Many export markets pay top dollar for prime cuts. Space in many
countries, especially in the
Orient, is unavailable for raising hogs, so buyers pay premium
prices for specialty cuts. This
market could be the best chance for Georgia producers to make
money in 1996.

If the industry liquidates its stock of hogs, McKissick said,
prices may rise briefly. If farmers sell
hogs for the slim profits, they may not replace those animals in
their herds, further decreasing
supply.

“As we begin (1996) we will likely be in the low $40 range
(per hundredweight),” he said,
“moving up into the $50 range by midyear and back down into the
mid-$40s as we close 1996.”